Question 3 Dee and Co. is a small manufacturing business which has prepared the following monthly budgeted figures for an average month: Production Volume Selling Price per Unit 15,000 units GH5.50 Sales Variable Costs Fixed Costs Profit GH82,500 GH37,500 GH20,000 GH25,000 Required: a) What is the contribution per unit? b) Determine the contribution to sales ratio. c) What is the number of units Dee and Co. needs to produce and sell each month in order to break even? 2. d) Find the sales revenue in value required to make a target profit of GH50,000. e) The managers are hoping to increase production to 18,000 units per month in the near future. What profit will Dee and Co. then make? f) If production falls from its present level, describe the effect that this will have on profits. g) The managers are thinking of installing a new machine which will increase Fixed Costs by 5,000 per month, but will reduce Variable Costs by 25%. If production remains at 15,000 units per month, what will be the profit if this is implemented, and what will be the new break-even point? Question 4